Lagos — Crude oil futures were relatively stable ahead of the U.S. trade policy announcement as market participants remained cautious, awaiting clarity on how tariffs may affect crude demand. Thinner trading volumes, due to the uncertainty around the risks for global demand, could lead to choppy trading.
An aggressive tariff policy could dampen economic growth and suppress crude consumption, potentially weighing on prices. Conversely, a more moderate approach could prevent a sharp decline and offer stability to oil prices.
The outlook is further complicated by the U.S. administration’s focus on secondary tariffs targeting Russian oil and the intensification of sanctions on Iran. The potential for geopolitical tensions to disrupt supply adds an element of risk.
Conversely, rising U.S. crude inventories could affect sentiment. While oversupply concerns could weigh on prices, supply disruptions due to sanctions may cushion its downside risks. The market could also react to additional inventory data from the EIA later today.
Meanwhile, sanctions on Venezuela’s oil sector have exacerbated supply concerns, with exports significantly reduced. These measures could tighten global supply, providing some support to crude prices.
*Li Xing Financial Markets Strategist Consultant to Exness
